US Says Swiss Watch Maker Hasn't Even Proven Its Watches Were Actually Imported

A Swiss watchmaker embroiled in a customs dispute with the U.S. since 2018 "failed to provide” evidence that the watches its commercial invoices identified were actually the ones it imported, the government said Aug. 13 in support of its cross-motion for judgment (Ildico v. United States, CIT # 18-00136).

In its previous motion, the government asked the Court of International Trade to either deny watch importer Ildico’s motion for judgment or to otherwise grant its own cross-motion (see 2406040042). It argued that the three watch samples the importer put on the record weren’t sufficient to support Ildico’s claim that its 35 imported watch models all have cases made “wholly of precious metals” -- especially as other information, such as the watches’ serial numbers, specifications, purchase orders and bills of materials, hadn’t been provided.

And even if the court did find the record adequate, Ildico overlooks the fact that its watch cases are made of gold alloy, which by definition isn’t “wholly” a precious metal, the government said.

In response, the importer argued that information such as the watches’ serial numbers wasn’t actually necessary to CBP’s classification decision, so the U.S. was just seeking to “distract from the legal issue.” It said it had already made two declarations that provided the necessary information.

But Ildico has the burden of proving that the watches being litigated are the same as the ones it imported, the U.S. said. It called this requirement a “threshold issue” rather than a “red herring.”

Instead, Ildico only provided a set of photographs that depict only the front of the watches; diagrams for three generic watch models that don’t include case backs; and declarations from a watchmaker and a company employee, it said. The photographs and diagrams are insufficient evidence because they don’t show the watch backs -- and the backs are the parts at issue here, it said. Further, the diagrams only depicted three watch models, it said, whereas Ildico imported 35.

And neither of the employees that gave declarations had actually been directly involved in importation of the watches, it said. As a result, they can’t have the “requisite personal knowledge” of the products to lend real weight to their declarations, it said.

Ildico also pushed back against the government’s interpretation of the Harmonized Tariff Schedule’s definition of a watch case as comprising "inner and outer cases, containers and housings for movements, together with parts or pieces," which "serve to complete the watches." The U.S. said in its cross-motion that the synthetic crystals on the backs of Ildico’s watches were “per se” part of the watches. In turn, Ildico argued this would lead to the “absurd” result that every part of a watch, including the front crystal and dial, could be considered part of the watch’s case; but this wasn’t what the government was saying, DOJ claimed.

A watch case separately imported with a watch glass would still be classified as a watch case, for example, it said. Further, it said, Ildico was maintaining that the synthetic crystals on the backs of its watches were second watch glasses, but that isn’t true: A watch glass is “a concavo-convex glass covering the dial of a watch,” meaning it must be installed opposite the watch dial.

“The synthetic sapphire crystal on the backs of the watches are ‘case backs,’” it said. “In fact, the Richard Mille [brand]’s watch ‘specifications’ expressly refer to the synthetic sapphire on the backs of the watches as a ‘case back.’”